With the notification of new ITR forms for AY 2024-25, taxpayers are faced with the challenge of choosing the right form amidst a plethora of options. The Central Board of Direct Taxes has notified new Income-tax Return (ITR) forms for Financial Year 2023-24 relevant to Assessment Year 2024-25 much before the due date of filing returns, which for the majority of taxpayers shall fall on July 31, 2024.

An individual taxpayer is required to select a correct return out of the four return forms, i.e., ITR-1(SAHAJ), ITR-2, ITR-3 and ITR-4 (SUGAM). In the absence of basic information about the applicability of such forms, after filling out part of the information in an ITR Form, you will find that the form is not applicable to you. There may be a situation where another ITR form selected is also not applicable to you after filling out part of the information.

The information given below may help you select the correct return at first go:-

Who is eligible to file- ITR-1 (SAHAJ)?

• An Individual whose total Income for the assessment year does not exceed Rs 50 Lakhs, and,
• Who is resident in India for that year,
• Who is not a Director in any company,
• Who has not held any unlisted equity shares at any time during the previous year relevant to the assessment year.
• Who does not held any Foreign Asset ( including financial interest in any entity located outside India) during the previous year relevant to the assessment year,
• Who is not a signing authority in any foreign account,
• Whoever is not having any income from foreign Sources,
• Who has income under one or more of the following heads-
  • Income from salary, including pension
  • Income from one House Property
  • Income from other sources- interest, dividends, family pensions, etc-
• Who was not subjected to TDS under for Cash Withdrawal u/s 194N,
• Who’s case income from ESOP has not been deferred,
• Who does not wish to carry forward loss from the House property and
• Whose agricultural income does not exceed Rs 5,000/-

Who are not eligible to file- ITR-1 (SAHAJ)?

• An Individual whose total Income for the assessment year exceeds Rs 50 lakh and-
• Who is non-resident in India for the assessment year,
• Who is a Director in any company,
• Who held unlisted equity shares any time during the previous year,
• Whoever held any Foreign Asset ( including financial interest in any entity located outside India),
• Who is the signing authority for any foreign account,
• Who has any income from foreign sources
• Who has income from one or more of the following-
  • Income from more than one House Property ,
  • Income from Business or Profession,
  • Income from Capital Gains,
  • Income from other sources other than interest, family pensions, etc.
• Who is subjected to TDS under for Cash Withdrawal u/s 194N,
• In this case, income from ESOP has not been deferred.
• Who wish to carry forward loss from the House property and
• Who wish to claim any deduction under the Income from other sources other than the Standard Deduction on Family Pension.
• Whose agricultural income for the financial year exceeds Rs 5,000/-

Who is eligible to file- ITR-2?

• This is applicable to all Individuals-
• Who are not eligible to file ITR-1 and ITR 4
• Who does not have income from Business or Profession

Which means-

• Whose total Income for the assessment year exceeds Rs 50 Lakhs
• Who is a Director in any company,
• Who held unlisted equity shares any time during the previous year,
• Whoever held any Foreign Asset ( including financial interest in any entity located outside India),
• Who is the signing authority in any foreign account,
• Who has any income from foreign Sources,
• Who has income from one or more of the following heads -
  • Income from salary or pension
  • Income from House Property ,
  • Income from Capital gains and
  • Income from other sources, including interest and family pension.
• Who is subjected to TDS under for Cash Withdrawal u/s 194N,
• In this case, income from ESOP has been deferred.
• Who wish to carry forward loss from the House property and
• Who wish to claim any deduction under the Income from other sources
• Whose agricultural income for the financial year exceeds Rs 5,000/-

Who is eligible to file- ITR-3?

This is applicable to all Individuals-

• Who are not eligible to file ITR-1, ITR-2 and ITR 4

Which means-

• Whose total Income for the assessment year exceeds Rs 50 lakh
• Who is a Director in any company,
• Who held unlisted equity shares any time during the previous year,
• Whoever held any Foreign Asset ( including financial interest in any entity located outside India),
• Who is the signing authority in any foreign account,
• Who has any income from foreign Sources,
• Who has income under one or more of the following-
  • Salary includes pension.
  • House Property ,
  • Business or profession, including the Income from business or profession computed on presumptive basis.
  • Income from Capital gains and
  • Income from other sources
• Who is subjected to TDS under for Cash Withdrawal u/s 194N,
• In this case, income from ESOP has not been deferred.
• Who wish to carry forward loss from the House property and
• Who wish to claim any deduction under the Income from other sources other than the Standard Deduction on Family Pension.
• Whose agricultural income for the financial year exceeds Rs 5,000/-

Who is eligible to file- ITR-4 (SUGAM)?

This form is applicable to Individuals -

• The total Income for the assessment year does not exceed Rs 50 Lakhs (it may be noted that the Total Income is the income computed after allowing deductions under Chapter-VIA ( Section 80C to 80U) from the Gross Total Income)
• Who is resident in India for the assessment year,
• Who is not a Director in any company,
• Whoever has not held unlisted equity shares any time during the previous year,
• Whoever does not hold any Foreign Asset (including financial interest in any entity located outside India),
• Who is not a signing authority in any foreign account,
• Whoever is not having any income from foreign Sources,
• Who has income under one one or more of the heads given below-
• Salary,
  • Income from one House Property,
  • Income business computed on presumptive basis u/s 44AD,
  • Income from business of plying, hiring or leasing of goods carriages computed u/s 44AE
  • Income from a profession computed under U/S 44ADA.
  • Income from other sources- interest, dividend, family pension, etc- no deduction other than standard deduction on family pension-(one or more of such source of income)
• Who was not subjected to TDS under for Cash Withdrawal u/s 194N,
• In whose case, income from ESOP has not been deferred,
• Who does not wish to carry forward loss from the House property, and
• Agricultural income does not exceed Rs 5,000/-

Conclusion

Selecting the correct ITR form is crucial for ensuring a hassle-free tax filing process and avoiding potential discrepancies with the income tax department. By understanding the specific requirements and limitations of each form, taxpayers can effectively assess their eligibility and make informed choices tailored to their financial circumstances.

[Disclaimer- The article is only for educational purposes and is not to be construed as tax advice. The relevant notifications and forms may be referred to, for complete understanding.]